Here’s what Wall Street experts are saying about Cisco ahead of earnings

Cisco (CSCO) is scheduled to report results of its fiscal fourth quarter after the market closes on August 16 with a conference call scheduled for 4:30 pm ET. What to watch for:

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GUIDANCE: Along with its last report, Cisco guided for Q4 adjusted earnings per share of $1.05-$1.07 on revenue growth of 14%-16%. At the time, analysts were expecting the company to report Q4 EPS of $1.04 on revenue of $14.96B, but those figures have since risen to $1.06 and $15.05B, respectively.

Additionally, Cisco last quarter raised its fiscal 2023 adjusted EPS guidance to $3.80-$3.82 from $3.73-$3.78 and increased its FY23 revenue growth view to 10%-10.5% from 9%-10.5%. At the time, analysts were expecting the company to report FY23 EPS of $3.75 on revenue of $56.55B, but those figures have since risen to $3.81 and $56.83B, respectively.

CITI CATALYST WATCH: Last week, Citi analyst Atif Malik opened a “30-day positive catalyst watch” on shares of Cisco Systems while keeping a Neutral rating on the name with a $54 price target. The analyst expects Cisco to outperform peers Arista (ANET) and Juniper (JNPR), saying strong enterprise demand will likely drive upside to its July quarter results. Cisco should benefit from its heavy enterprise exposure, the analyst told investors in a research note.

JPMORGAN UPGRADE: Last month, JPMorgan upgraded Cisco Systems to Overweight from Neutral with a price target of $62, up from $55. The analyst sees limited further downside in the shares due to enterprise spending and an “inexpensive” valuation. The firm expects the magnitude of Cisco’s order moderation to be limited going forward following a deterioration in order trends for multiple quarters. While the macro environment will continue to drive spending sluggishness from customers, orders for networking equipment including Wi-fi, campus switching, and datacenter switching have limited further deterioration, the analyst told investors in a research note. JPMorgan added at the time that it believes investors will start taking a more favorable view of Cisco shares.

BOFA DOWNGRADE: Also in July, BofA analyst Tal Liani downgraded Cisco to Neutral from Buy with an unchanged price target of $56. Street estimates are pointing to a “soft landing” for Cisco’s product revenue growth, but this leads to FY24 and FY25 product revenue growth forecasts that are “much higher than historical levels” and the firm sees “risk of disappointment,” the analyst told investors. The firm has reduced its own estimates to reflect concerns over near-term trends and risks to FY24 and FY25 product revenue on normalized backlogs.